Longer Term and Overpay vs Shorter Term

Terry111

Hi All,

I will need to remortgage soon and I am pretty new to the mortgage game.

I have a 25 year mortgage on a 3 year tracker which expires in a few months.

Would there be any value in me remortgaging for 25 years thus having a lower monthly repayment and making overpayments rather than just remortgaging for a 22 year term?

I realise this would depend on the numbers involved but just wondered if there was a theory behind this?

As mortgage payments are both interest and capital (huge interest payments when the term is so long!) whereas overpayments are pure capital I wondered if this was worth persuing.

Many Thanks in advance

DVardysShadow

Personally, I would not extend the term unless forced by circumstances. So many people live most of their working lives with a mortgage and get too comfortable with it - increasing their borrowing so that when they are forced to retire, they have no means of paying the money off, or just reaching pension age with no plan to repay..

Extending the term is increasing the financial slack, but I reckon it is better to keep the tension up for repaying.